Article from: OGEL 5 (2004), in Roundup of Articles
WASHINGTON, DC -- In a letter sent today [18 January 2005] to the head of OPEC, several members of the United States Senate expressed their concerns over the recent decision by the oil cartel to significantly reduce the amount of oil produced causing serious strains on the economy of the United States. Signing on to the letter written by New Jersey Senator Frank R. Lautenberg, were Senators Kent Conrad (D-ND), Byron Dorgan (D-ND), Charles Schumer (D-NY) and Democratic Whip Richard J. Durbin (D-IL).
"We are deeply concerned by OPEC's recent decision to cut petroleum output by 1 million barrels heading into the height of winter. With oil still trading well in excess of $40 per barrel, we believe this action is unwarranted... The present high oil prices are harming the U.S. economy, and they are therefore of great concern to us. We will continue to monitor this situation closely, and we are prepared to take appropriate action to ensure that American families and businesses have access to affordable energy," wrote the lawmakers in the letter sent to Sheikh Ahmad Fahad Al-Ahmad Al-Sabah, Acting Secretary General of the Organization of the Petroleum Exporting Countries
In addition, OPEC's continuing output-restricting activities raise questions about the WTO commitments of its member nations. More than half of OPEC's members are also WTO members, and WTO rules prohibit countries from imposing export quotas. OPEC's use of export quotas appears to constitute a potential violation of WTO rules charged the lawmakers in their letter.
"Decisions made by OPEC should not hurt those families here in the U.S. struggling to fill their tanks and keep their homes warm during the winter," added Lautenberg. "It is critical OPEC do what it has promised to do, and any actions taken that significantly increase the cost of gas should be legal under international trade rules."
A full copy of the letter sent to OPEC can be found below.
January 14, 2005
His Excellency Sheikh Ahmad Fahad Al-Ahmad Al-Sabah Acting Secretary General Organization of the Petroleum Exporting Countries Obere Donaustrasse 93 A-1020 Vienna AUSTRIA Your Excellency: We are deeply concerned by OPEC's recent decision to cut petroleum output by 1 million barrels heading into the height of winter. With oil still trading well in excess of $40 per barrel, we believe this action is unwarranted. OPEC's decision to cut production at this point in time makes us question the cartel's commitment to the $22-28 per barrel price band it ...